How do social protection and agricultural policies interact? What are the synergies or conflicts between them? This study examines the situation in poor communities in Africa and explores how social and agricultural policies can complement each other. Social protection can promote food security and agricultural production directly. However, the mix of policies and instruments needed to achieve both ‘livelihood protection’ and ‘livelihood promotion’ must be determined by levels of economic activity, infrastructure and market development.
Until recently, it was widely believed that agricultural and social policies served different objectives. Agricultural policies were seen to promote growth in yields and incomes, while social protection policies were thought to stabilise yields and consumption when production failed. However, this view has been challenged by evidence that both objectives can be achieved in a single instrument. Since social protection measures help poor rural people expand their assets, use them more efficiently and adopt higher return activities, there can be strong synergies with agricultural development. Conversely, agricultural policies can help farmers improve their livelihoods and reduce their vulnerability. But conflicts can occur if policy objectives are inconsistent with each other.
Successful rural development requires complex transitions, not only in policy objectives but in the nature of instruments, notably in a switch from non-market to market-based instruments. Market-based solutions that work in countries that have some rural growth will not necessarily drive growth and transformation in countries still dominated by semi-subsistence agriculture. In the early stages of agricultural development, therefore, non-market mechanisms must be used in ways that do not undermine market development.
- Food aid might be an essential social protection instrument at one point in time but can hinder the attainment of longer-term growth objectives if it becomes institutionalised.
- Low food prices are good for poor consumers, but high prices are needed to stimulate investment in agriculture and raise smallholders’ incomes.
- Everyone who engages in agriculture-based livelihoods needs continuity and stability in the policies that affect their efforts to make a living. Predictability and continuity drives investment and asset accumulation.
- Policy should evolve as economies and societies change, but policy changes need to be clearly and transparently articulated in terms of the longer-term vision that government is pursuing.
In order to maximise synergies between social protection and smallholder policies, organisations engaged in promoting agricultural development and food security need to bear in mind the following issues:
- Food-based social transfers can promote rather than inhibit agricultural growth, provided that food is sourced locally and its impacts on production and markets are closely monitored.
- Maximising synergies requires that social transfers are guaranteed, predictable and regular so that they perform an effective insurance function.
- Asset transfers and ensuring access to agricultural inputs are essential in order to help smallholders escape from ‘low input, low output’ poverty traps.
- Policy interventions need to correct for market failures without undermining incentives in the local food system.
- The complexity of agricultural transitions and the ever-increasing range of available policy instruments means that policymakers, analysts, bureaucrats and operational staff must acquire the relevant information and analytical skills.
